Public (Interest) or Private (Gain)? The Curious Case of Network Rail's Status

This paper develops Whitehouse's 2003 examination of the creation of Network Rail, a case study of New Labour's attempt to operationalize the 'third way'. Significant changes have occurred since 2003 which make Network Rail's position as a private company with private sector...

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Bibliographic Details
Published in:Journal of law and society 2007-06, Vol.34 (2), p.244-265
Main Author: Jupe, Robert
Format: Article
Language:English
Subjects:
Business
Business structures
Costs
Debt
Economic policy
Enterprises
Financial liabilities
Government policy
Industrial regulation
Labour parties
Law schools
Political parties
Private Sector
Privatization
Public infrastructure
Public sector
Public sector industries
Rail industry
Railroad transportation
Railway transport
Third rail
Transportation regulation
United Kingdom
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Summary:This paper develops Whitehouse's 2003 examination of the creation of Network Rail, a case study of New Labour's attempt to operationalize the 'third way'. Significant changes have occurred since 2003 which make Network Rail's position as a private company with private sector debt appear increasingly anomalous. These changes include: the reclassification of the debt of another rail company from private to public, and the introduction of 'imputed debt' into public sector debt measurement; new funding arrangements for Network Rail which make it heavily dependent on public support; and important rail regulatory policy changes. The paper analyses these changes, and revisits Whitehouse's conclusions. In particular, this paper challenges Whitehouse's contention that Network Rail's creation led to the de facto renationalization of the railway infrastructure at a reduced public cost. The paper demonstrates that Network Rail is a very expensive mechanism for channelling public money to private companies, and argues that the Labour government's attempt to maintain the company's private sector status as part of its third way approach is ultimately untenable.
ISSN:0263-323X
1467-6478
DOI:10.1111/j.1467-6478.2007.00390.x